Method of and system for effecting anonymous credit card purchases over the internet

ABSTRACT

A transaction system for performing secure transactions over a communication network includes (i) a merchant server system including a computer processor and associated memory, the merchant server system offering items for sale; (ii) a buyer system including a computer processor and associated memory, the buyer system being selectively couplable to the merchant server system over the communication network to initiate a transaction, wherein, during the transaction, the buyer system selects one or more of the items for purchase; (iii) a security server system including a computer processor and associated memory and an encryption device, the security server system receiving buyer information from the buyer system, encrypting the buyer information in an encryption key that prevents the merchant server system from decrypting the buyer information, and transferring the encrypted buyer information to the merchant server system; and (iv) a third server system including a computer processor and associated memory, the third server system being selectively couplable to the merchant server system, wherein the merchant server system transmits at least a portion of the encrypted buyer information to the third server system for processing during the transaction.

CROSS-REFERENCED APPLICATIONS

This application claims the benefit from U.S. application Ser. No.60/194,346, filed Apr. 3, 2000; U.S. application Ser. No. 60/254,056,filed Dec. 7, 2000; U.S. application Ser. No. 60/251,984, filed Dec. 7,2000; and U.S. application Ser. No. 60/273,595, filed Mar. 5, 2001, thedisclosures of which are hereby incorporated by reference into thisapplication.

FIELD OF THE INVENTION

This invention relates generally to a method of and system for effectinganonymous and secure credit card purchases over the internet and moreparticularly to a method of and system for encrypting and distributing apurchaser's private information such that only parties authorized toreceive the information receive it and are able to decrypt it.

BACKGROUND OF THE INVENTION

To make purchases using the Internet, buyers are required to disclosethe buyer's name, address, shipping address, and credit card number tothe merchant. Many would-be purchasers are uncomfortable with providingsuch information to the Web merchant, because they are concerned thattheir credit card numbers could be misused and that their privacy couldbe compromised. As a result, such potential buyers choose not to use theInternet to make purchases or restrict their purchases to particularmerchants whom they trust. The growth of e-commerce is restricted bythese privacy and security concerns.

Likewise, businesses that make Internet purchases from other businessesusing the Internet are required by present Internet order processingsystems to reveal identifying and payment information to the sellingbusiness that may result in the compromise of information regarding thetransaction that the buyer would prefer to remain private.

SUMMARY OF THE INVENTION

The growth of the Internet for consumer and commercial transactionscreates a need to control what information is revealed to whom in thecourse of the transaction. In the case of Internet transactions thatinvolve more than two parties (such as an e-commerce transactioninvolving a buyer, a seller, a merchant acquirer, and a deliverycompany), all participants will benefit from a technology solution thatprovides each party with only that kind and amount of information aboutthe transaction that is required in order for the transaction to becompleted.

The preferred solution to the Internet privacy problem will not requirethe buyer to take extra steps such as downloading software or browsingto a special Internet site in order to obtain an alias identity. Mostbuyers will be unwilling to take such extra effort, and will prefer asolution that will enable them to browse directly to the merchant's Website and to make private and secure purchases without the need to takeany extra steps or precautions, and without noticeable latency.

The preferred solution to the need to control the distribution ofinformation among multiple parties to an Internet transaction willmanage disclosure to each party such that each party receives only thatinformation it needs to complete the transaction, without any need toestablish any party as a trusted repository of the information ofothers.

The present invention provides a method and system for anonymous andsecure Internet commerce under which each party to a transactionreceives only the specific information it needs to know in order for thetransaction to be completed, and by which the buyer can remain anonymousto the merchant. The invention enables the buyer to browse directly tothe merchant's Web site without taking any extra or preliminary steps,and also enables the transaction to be consummated without disclosure ofthe buyer's name, address or credit card number to the merchant. Theinvention further enables the merchant to determine what specificinformation of the buyer will be disclosed to the merchant, and thus tooffer the buyer a technological guarantee that it will not see any buyerinformation that is designated by the merchant as private to the buyer.Where the merchant is offering anonymity to the buyer, the inventionprovides a method and system by which the buyer's anonymity isprotected, not only for purchases, but also for ordinary returns andchargebacks. In addition, the invention enables the buyer and seller tocommunicate privately by e-mail.

The buyer begins the transaction by browsing to the Web site of theInternet merchant, where the buyer identifies any items it wishes topurchase and places them in a shopping cart. The buyer is not requiredto browse first to a third-party's Web site, nor is the buyer requiredto download any software.

After selecting the items it wishes to purchase from the merchant's Website, the buyer clicks on a checkout button and is redirected to thesecurity server system of the present invention, which resides on adifferent computer than that of the merchant. The security server systemserves up one or more forms that are filled in by the buyer, consistingof one or more checkout forms, a payment instrument form, an emailaddress form, and a delivery information form. Some or all of these datasupplied by the buyer are encrypted using the public keys of thoseentities that need to know those items of information in order for thetransaction to be completed and assembled into a protected informationpackage that is then sent from the security server system to themerchant. Preferably, a public key security system such as RSA is usedto encrypt the buyer's information.

The merchant receives the information package(s) and stores their dataelements in an order management database in their encrypted form. Themerchant does not possess the capability of decrypting information inthe protected information package that is delivered to the merchant inencrypted form, although it does have the capability of reading anyinformation that is passed to the merchant from the security serversystem in unencrypted form.

The merchant sends an encrypted payment authorization request to themerchant acquirer or to the issuing bank. The merchant acquirer orissuing bank decrypts the payment authorization request, processes thatrequest, and sends a response to the merchant either authorizing ordenying the transaction. The merchant can communicate with the buyerwithout knowing the real e-mail address of the buyer by using a securemail feature of the present invention. In that situation, the merchantdirects its e-mail to the buyer through the security server system. Thesecurity server system assigns alias identities to the merchant and thebuyer. Only the merchant can communicate with the buyer using the securemail feature.

In situations where the buyer is purchasing hard goods for delivery tohis address, the merchant sends an encrypted delivery request to thedelivery company containing the buyer's name and shipping address and anorder number, or other appropriate information. The delivery companydecrypts the delivery request and provides the merchant with a numericalidentifier that it associates with the goods ordered by the buyer. Themerchant, or a party providing fulfillment services on behalf of themerchant, receives the numerical identifier and places it on the packagecontaining the goods ordered by the buyer. The delivery company picks upthe package from the merchant or fulfillment party, translates thenumerical identifier as necessary, and delivers the package to thebuyer.

The invention also accommodates returns and chargebacks withoutcomprising the anonymity of the buyer.

The invention satisfies the following objectives:

-   -   1. Buyers can make online purchases without disclosing their        names, addresses, or payment instrument information to the        seller.    -   2. Buyers are not required to go to third-party Web sites or to        download software in order to make anonymous and secure        purchases from the merchant. All the buyer has to do is to        browse directly to the merchant's site and make a purchase by        filling in a shopping cart and providing the standard items of        information by completing standard forms served to the buyer.    -   3. Internet merchants can offer complete anonymity to        privacy-sensitive buyers and eliminate the risk of loss from        credit card theft and hacking.    -   4. Merchants using the invention can continue to offer        personalization to their customers.    -   5. Merchants using the invention select the level of privacy        that will be delivered to their customers—full anonymity or        credit card privacy. In both cases, the merchant never receives,        stores or transmits the customer's credit card information.    -   6. The invention provides a universal transaction interface        through which merchants can deploy a wide range of new payment        and security technologies (including smart cards, biometric        identity verification, digital signatures, on-line checks, ATM        cards, and person-to-person payments) without further changes to        the merchant's order processing systems.    -   7. The invention permits e-mail communications without        compromising the anonymity of the buyer.

According to one aspect of the invention, a transaction system forperforming secure transactions over a communication network includes (i)a merchant server system including a computer processor and associatedmemory, the merchant server system offering items for sale; (ii) a buyersystem including a computer processor and associated memory, the buyersystem being selectively couplable to the merchant server system overthe communication network to initiate a transaction, wherein, during thetransaction, the buyer system selects one or more of the items forpurchase; (iii) a security server system including a computer processorand associated memory and an encryption device, the security serversystem receiving buyer information from the buyer system, encrypting thebuyer information in an encryption key that prevents the merchant serversystem from decrypting the buyer information, and transferring theencrypted buyer information to the merchant server system; and (iv) athird server system including a computer processor and associatedmemory, the third server system being selectively couplable to themerchant server system, wherein the merchant server system transmits atleast a portion of the encrypted buyer information to the third serversystem for processing during the transaction.

The third server system may be one of a delivery server system and apayment processor server system. The encrypted buyer informationreceived by the delivery server system may be delivery addressinformation of the buyer. The encrypted buyer information received bythe payment processor server system may be payment information of thebuyer. The transaction system may further include a fourth server systemincluding a computer processor and associated memory, the fourth serversystem being selectively couplable to one of the merchant server systemand the third server system, wherein the one of the merchant serversystem and the third server system transmits at least a portion of theencrypted buyer information to the fourth server system for processingduring the transaction. The security server system may encrypt the buyerinformation into a first document and a second document, wherein thefirst document is transmitted to the third server system by the merchantserver system and the second document is transmitted to the fourthserver system by the merchant server system. The security server systemmay encrypt the buyer information into a first document and a seconddocument, wherein the first and second documents are transmitted to thethird server system by the merchant server system and the seconddocument is transmitted to the fourth server system by the third serversystem. The third server system may be one of a delivery server systemand a payment processor server system and wherein the fourth serversystem is the other of the delivery server system and the paymentprocessor server system, and wherein the first document may contain oneof the buyer system's delivery address information and the buyersystem's payment information and the second document may contain theother of the buyer system's delivery address information and the buyersystem's payment information. The security server system may encrypt thefirst document using a first encryption key and the second documentusing a second encryption key, wherein the one of the third serversystem and the fourth server system that receives the first document candecrypt the first document but not the second document and wherein theother one of the third server system and the fourth server system thatreceives the second document can decrypt the second document but not thefirst document

According to another aspect of the invention, a system for performingsecure transactions over a communication network includes (i) a merchantserver system including a computer processor and associated memory, themerchant server system offering items for sale; (ii) a buyer systemincluding a computer processor and associated memory, the buyer systembeing selectively couplable to the merchant server system over thecommunication network to initiate a transaction, wherein, during thetransaction, the buyer system selects one or more of the items forpurchase; (iii) a security server system including a computer processorand associated memory, the security server system being selectivelycouplable to the buyer system to receive buyer information from thebuyer system in the course of the transaction, the buyer informationincluding delivery address information and payment information; (iv) adelivery server system including a computer processor and associatedmemory; and (v) a payment processor server system including a computerprocessor and associated memory. The security server transmits thedelivery address information to the delivery server system and thepayment information to the payment processor server system.

The security server system may encrypt the delivery address informationinto a first document and the payment information into a seconddocument. The security server system may transmit the first and seconddocument to the merchant server system, which transmits the firstdocument to the delivery server system and the second document to thepayment processor server system. The merchant server system is incapableof decrypting the first and second documents.

According to another aspect of the invention, a transaction system forperforming secure transactions over a communication network includes (i)a merchant server system including a computer processor and associatedmemory, the merchant server system offering items for sale; (ii) a buyersystem including a computer processor and associated memory, the buyersystem being selectively couplable to the merchant server system overthe communication network to initiate a transaction, wherein, during thetransaction, the buyer system selects one or more of the items forpurchase and transmits information regarding the one or more items tothe merchant server system; (iii) a security server system including acomputer processor and associated memory and an encryption device, thesecurity server system receiving buyer information from the buyersystem, encrypting the buyer information in an encryption key thatprevents the merchant server system from decrypting the buyerinformation, and transferring the encrypted buyer information to themerchant server system; and (iv) a third server system including acomputer processor and associated memory, the third server system beingselectively couplable to the merchant server system, wherein themerchant server system transmits at least a portion of the encryptedbuyer information to the third server system for processing during thetransaction.

According to another aspect of the invention, a system for performingsecure transactions over a communication network includes (i) a merchantserver system including a computer processor and associated memory, themerchant server system offering items for sale; (ii) a buyer systemincluding a computer processor and associated memory, the buyer systembeing selectively couplable to the merchant server system over thecommunication network to initiate a transaction, wherein, during thetransaction, the buyer system selects one or more of the items forpurchase and (iii) a security server system including a computerprocessor and associated memory and an encryption device, the securityserver system receiving buyer information from the buyer system andforming a merchant document including information regarding the itembeing purchased, encrypting the buyer information into a paymentdocument including the buyer's payment information and encrypting thebuyer information into an address document including the buyer'sshipping address. The security server system transfers the buyerinformation to a first one of the merchant server system, a paymentserver system and a delivery server system, wherein the first systemremoves the document associated with the first system and transmits theremaining documents to a second one of the merchant server system, thepayment server system and the delivery server system, wherein the secondsystem removes the document associated with the second system andtransmits the remaining document to a third one of the merchant serversystem, the payment server system and the delivery server system. Thesecurity server system encrypts the buyer information using anencryption key in which only the payment server system is capable ofdecrypting the payment document and only the delivery server system iscapable of decrypting the address document.

According to yet another aspect of the invention, a method forperforming secure transactions over a communication network includes:

A. establishing a connection between a buyer system and a merchantserver system over the communications network to initiate a purchasetransaction;

B. the buyer system selecting an item offered for sale by the merchantserver system;

C. the buyer system transmitting buyer information to a security serversystem;

D. the security server system encrypting the buyer information using anencryption key that prevents the merchant server system from decryptingthe encrypted buyer information;

E. the security server system transmitting the encrypted buyerinformation to the merchant server system;

F. the merchant server system transmitting at least a portion of theencrypted buyer information to a third server system for processingduring the purchase transaction; and

G. the third server system decrypting the at least a portion of theencrypted buyer information before processing the information.

According to yet another aspect of the invention, a method foridentifying a party includes, in a security server system including acomputer processor and associated memory, the security server systembeing selectively couplable to a second server system, including acomputer processor and associated memory, over a communications network,performing the steps of:

A. obtaining a plurality of identifying indicia from each of a pluralityof parties;

B. performing a one-way hash function on each of the plurality ofidentifying indicia to form a plurality of hashed identifiers, wherein aparticular output of the one-way hash function is unique to a particularinput of the hash function;

C. forming an array of hashed identifiers for each of the plurality ofparties, wherein each array includes a number of hashed identifiers thatare unique to each party; and

in the second server system, performing the steps of:

D. receiving an identifying indicium from a party;

E. performing the hash function on the indicium to form a hashedindicium;

F. parsing each of the arrays to determine if the hashed indiciumcoincides with a hashed identifier therein;

G. determining which, if any, of the arrays contains a coincidencebetween the hashed indicium and a hashed identifier;

wherein, if only one coincidence occurs, the method comprises:

H. identifying a unique party from the plurality of parties based thecoincidence between the hashed indicium and the hashed identifier, andwherein, if more than one coincidence occurs, the method comprises:

I. repeating steps D-G until one of the arrays contains a set ofcoincidences that none of the other arrays contain; and

J. identifying a unique party from the plurality of parties based on theset of coincidences.

BRIEF DESCRIPTION OF THE DRAWINGS

The foregoing and other objects of this invention, the various featuresthereof, as well as the invention itself may be more fully understoodfrom the following description when read together with the accompanyingdrawings in which:

FIG. 1 is a schematic diagram of conventional information distributionin an online transaction;

FIG. 2 is a schematic diagram of the system for effecting anonymouscredit card purchases in accordance with the present invention;

FIGS. 3A-3F are schematic diagrams showing different types oftransactions that may be carried out according to the present invention;

FIG. 4 is a schematic diagram showing the steps involved in a purchasetransaction in accordance with the present invention;

FIG. 5 is a schematic diagram showing the steps involved in a returntransaction in accordance with the present invention;

FIGS. 6A-6C are a schematic diagrams showing the steps involved in achargeback transaction in accordance with the present invention;

FIG. 7 is a schematic diagram showing the steps involved in enablingprivate communication between a merchant and a buyer using alias emailaddresses in accordance with the present invention;

FIG. 8 is a schematic diagram showing the steps involved in the creationof an electronic wallet in accordance with the present invention;

FIG. 9 is a schematic diagram showing the steps involved in a purchasetransaction using the electronic wallet in accordance with the presentinvention;

FIG. 10 is a schematic diagram showing the steps involved in a directmarketing fulfillment transaction in accordance with the presentinvention;

FIG. 11A is a schematic diagram showing the creation of a digest arrayin accordance with the present invention;

FIG. 11B is a schematic diagram showing the steps involved utilizing adigest array to identify a buyer in accordance with the presentinvention; and

FIGS. 12A-12B are schematic diagrams showing other types of purchasetransaction schemes in accordance with the present invention.

DETAILED DESCRIPTION

FIG. 1 is a schematic diagram of a conventional online transaction inwhich a buyer 12, during the course of the online transaction, providescertain information S to the merchant 14. This information S includesthe buyer's delivery address, payment information, such as a credit cardnumber, and information about the item being purchased. In thisconventional transaction, the merchant 14 possesses and has access toall of the buyer's information. The merchant 14 distributes the buyer'sdelivery address information S₁ to the delivery firm 16 and distributesthe buyer's payment information S₂ to the payment processor 18. When thepayment is approved by the payment processor 18, the transaction isconsummated and the delivery firm 16 picks up the item from the merchant14 or an agent of the merchant 14 and delivers the item to the buyer 12.While this type of transaction has been generally successful in enablingbuyers to purchase item from merchants, a potential security risk existssince at least one party other than the buyer has possession of all ofthe buyer's private information.

FIG. 2 shows a diagram of a system 100 for enabling secure onlinetransactions in which the merchant either never possesses all of thebuyer's information or possesses the information in a form that itcannot read in accordance with a preferred embodiment of the presentinvention. The system 100 includes buyer system 110, merchant serversystem 120, security server system 130, a payment processor serversystem 140, including merchant acquirer server system 142 and bankserver system 144, and delivery server system 160, all connected to acommon communications network 170. Preferably, the buyer system 110,merchant server system 120, security server system 130, merchantacquirer server system 142, bank server system 144 and delivery serversystem 160 are each a personal computer such as an IBM PC or IBM PCcompatible system or an APPLE® MacINTOSH® system or a more advancedcomputer system such as an Alpha-based computer system available fromCompaq Computer Corporation or SPARC® Station computer system availablefrom SUN Microsystems Corporation, although a main frame computer systemcan also be used. Preferably, the communications network 170 is aTCP/IP-based network such as the Internet or an intranet, althoughalmost any well known LAN, WAN or VPN technology can be used.

In one preferred embodiment of the invention, the buyer system 110 is anIBM PC compatible system operating an operating system such as theMicrosoft Windows® operating system, and merchant server system 120,security server system 130, merchant acquirer server system 142, bankserver system 144 and delivery server system 160 are configured as webservers providing access to information such as web pages in HTML formatvia a protocol such as the HyperText Transport Protocol (http). Thebuyer system 110 includes software to allow viewing of web pages,commonly referred to as a web browser, thus being capable of accessingweb pages located on merchant server system 120 and security serversystem 130. Alternatively, buyer system 110 can be any wired or wirelessdevice that can be connected to a communications network, such as aninteractive television system, such as WEBTV, a personal digitalassistant (PDA) or a cellular telephone. In this preferred embodiment,merchant server system 120 is an e-tail system offering a plurality ofitems for sale over the Internet.

While the specific steps involved in the secure transaction system ofthe present invention are described in detail below, FIGS. 3A-3E areschematic diagrams showing various forms of transactions that areachievable with the present invention. Each of FIGS. 3A-3E shows thetransfer of information after the buyer has selected an item to purchasefrom the merchant server system and has proceeded to the checkoutprocess.

FIG. 3A shows a transaction in which the buyer system 110 provides a setof information S to the security server system 130. As set forth abovethe information S includes the buyer's delivery address information,payment information and optionally, information about the item beingpurchased, such as a stock number, etc. The security server system,which is operated separately from the merchant, is dedicated tocollecting the buyer's information and protecting the buyer'sinformation as encrypted documents. In the transaction of FIG. 3A, twoencrypted documents are created from the buyer's information S: adelivery document E₁ that can only be decrypted by the participatingdelivery server system 160 and a payment document E₂ that can only bedecrypted by the participating payment processor server system 140. Onceencrypted, the documents E₁ and E₂ are then transmitted to the merchantserver system 120 for storage and processing. At no time can themerchant server system 120 decrypt the documents, but the merchantserver system 120 can use them for a full range of services, includingall credit card transaction types (e.g. authorization, settlement, void,chargeback) and for shipping and returns. Thus, the merchant serversystem 120 can never see the personal information S of the buyer, but isnot hindered in its service offering.

FIG. 3B shows a transaction where the buyer's delivery addressinformation S₁ and payment information S₂ are transmitted to thesecurity server system 130 while the purchase item information S₃ istransmitted directly to the merchant server system 120. The securityserver system 130 encrypts the information S₁ and S₂ to form encrypteddocuments E₁ and E₂ which are transmitted to the merchant server system120. The merchant server system 120 then transmits the encrypteddelivery document E₁, which includes the buyer's delivery addressinformation, to the delivery server system 160 and transmits theencrypted payment document E₂, which includes the buyer's paymentinformation, to the payment processor server system 140. The deliveryserver system 160 and the payment processor server system 140 thendecrypt their respective documents and the transaction can then becarried out without the merchant ever having possession of the buyer'sdeliver address information or payment information.

FIG. 3C shows a transaction in which transfer of information between thebuyer system 110, the security server system 130 and the merchant serversystem 120 is the same as that shown in FIG. 3B. However, in thistransaction, the encrypted delivery document E₁ is transmitted from themerchant server system 120 to a intermediate delivery server system 162which decrypts the document E₁ and transmits the decrypted informationS₁ to the delivery server system 160. Likewise, the encrypted paymentdocument E₂ is transmitted from the merchant server system 120 to anintermediate payment server system 146 which decrypts the document E₂and transmits the decrypted information S₂ to the payment processorserver system 140.

FIG. 3D shows a fork-type transaction in which the buyer 110 providesits information S to the security server system 130. The security serversystem then separates the information into separate documents anddistributes the delivery address information S₁ to the delivery serversystem 160, the payment information S₂ to the payment processor serversystem and the purchase item information S₃ to the merchant serversystem 120. In this transaction, even though the buyer's information isnot encrypted, the security server system 130 ensures that each serversystem receives only the information necessary for it to enable thepurchase transaction.

FIG. 3E shows an encryption pipe-type transaction, in which the buyer110 provides its information S to the security server system 130. Thesecurity server system 130 encrypts the information to form an encrypteddocument E₁, which includes the buyer's delivery address information andan encrypted document E₂, which includes the buyer's paymentinformation. The encrypted documents E₁ and E₂ are then transmitted tothe merchant server system 120, which transmits both encrypted documentsto the delivery server system 160, which retains the encrypted deliverydocument E₁ and transmits the remaining encrypted payment document E₂ tothe payment processor server system 140.

FIG. 3F shows an encryption pipe-type transaction, in which the buyer110 provides its delivery address information S₁ and its paymentinformation S₂ to the security server system and order information S₃,particularly information regarding the item being purchased by thebuyer, to the merchant server system 120. The security server system 130encrypts the information S₁ and S₂ to form an encrypted document E₁ andE₂, respectively. The encrypted documents E₁ and E₂ are then transmittedto the merchant server system 120, which transmits both encrypteddocuments to the delivery server system 160, which retains the encrypteddelivery document E₁ and transmits the remaining encrypted paymentdocument E₂ to the payment processor server system 140.

In a preferred embodiment of the invention, the buyer's privateinformation, including delivery address information and paymentinformation, is not disclosed to the merchant server system 120. Thebuyer provides this information directly to the security server system130 which encrypts the delivery address information into a deliverydocument and encrypts the payment information into a payment document.These documents are encrypted using a key which enables only thedelivery server system 160 to decrypt the delivery document and whichenables only the payment processor server system 140 to decrypt thepayment document. These documents are transmitted by the security serversystem 130 to the merchant server system 120, which then transmits thedelivery document to the delivery server system 160 and the paymentdocument to the payment processor server system 140. The paymentprocessor server system 140 is able to decrypt the payment document toauthorize the payment and the delivery server system 160 is able todecrypt the delivery document to provide delivery of the purchased itemto the buyer. In order to enable the delivery server system 160 todeliver the item from the merchant, the delivery server system providesthe merchant server system 120 with an address signature code whichpreferably is a bar code that corresponds to an order number on themerchant server system. The delivery address information of the buyer isstored in the delivery server system and is “tagged” with the addresssignature. The merchant server system labels the package containing theitem with the address signature. When the delivery firm associated withthe delivery server system 160 picks up the package from the merchant,it reads the address signature to determine the address to which thepackage will be delivered.

FIG. 4 is a schematic diagram which specifically shows this transfer ofinformation between the buyer system 110, merchant server system 120,security server system 130, merchant acquirer server system 142, bankserver system 144 and delivery server system 160 in accordance with thepresent invention. In each of FIGS. 4-10, a vertical bar in the columnbelow each of the systems 110, 120, 130, 142, 144 and 160 indicates anaction performed by the associated system. Furthermore, tasks shown in asolid line indicate data transmitted “in the clear” or unencrypted,tasks shown in dotted dashed lines indicate tasks performed by thesecurity server system 130 or tasks performed under the direction ofsecurity server system 130 and tasks shown in dotted lines indicate atransfer of encrypted data.

In step 202, the buyer system 110 initiates a connection to the merchantserver system 120 over network 170. The buyer system 110 places one ormore items in the shopping cart provided by the merchant server system120, step 204, and proceeds to checkout, step 206, thus initiating thepurchase transaction. Upon checkout, the buyer system 110 is transferredto the security server system 130, step 206. In the transfer, themerchant server system 120 references an XML document that containsinstructions to the security server system 130 for what information isneeded to be collected from the buyer system 110, and for which otherserver systems the resulting documents are to be encrypted. Securityserver system 130 maintains a schema to ensure that the merchant serversystem 120 cannot direct information to be encrypted for inappropriaterecipients (such as credit cards to a delivery firm). Not all of thecollected information needs to be encrypted, and some information may beencrypted for more than 1 recipient, and some may be both encrypted intodocuments and sent back “in the clear” or unencrypted. Security serversystem 130 serves forms (either created dynamically or drawn from alibrary of static forms) to the buyer system 110, step 208, to collectthe sought information that was defined in the XML instructions of themerchant server system 120. In steps 210-214, the buyer system 110provides, to the security server system 130, the necessary paymentinformation, including credit card number and expiration date, the buyersystem's email address and the buyer system's delivery addressinformation. As the buyer's information is being received, the securityserver system 130 creates, in steps 212-218, an encrypted deliverydocument E₁ that includes the buyer's delivery address information andan encrypted payment document E₂ that includes the buyer's paymentinformation. Encrypted delivery document E₁ preferably includes thebuyer's name, delivery address, email address and the name of thedelivery company. This document is encrypted with a key such that onlythe delivery server system is capable of decrypting the informationcontained therein. Encrypted payment document E₂ preferably includes amerchant identification number (MID), a transaction identificationnumber (TID), the credit card type, number, expiration date, the name onthe credit card, the billing address associated with the credit carddigital signature, a debit limit, which ensures that the credit card isnot charged above the order amount and an order expiration date. Thisdocument is encrypted with a key such that only the payment processorserver system is capable of decrypting the information containedtherein. Security server system 140 also creates an alias email addressfor the buyer. The alias email address is discussed in greater detailbelow with reference to FIG. 7. In step 218, the security server systemcreates a digest array, which includes all of the information collectedby the security server system 130. This array is used to identify thebuyer during future transactions, as is described in greater detailbelow with reference to FIG. 11A. In step 220, a package of theencrypted documents is assembled and transmitted to the merchant serversystem 120, step 222.

The package of information is transmitted to the merchant server system120 as items in an XML document, including encrypted documents E₁ andE₂, and unencrypted documents and one or more digest arrays. The XMLtags are not encrypted so that the XML document can be parsed by themerchant server system 120. The merchant server system 120 receives theXML document and parses out the discrete items, step 222. The items arestored in the merchant server system's order processing system, step224. The merchant server system 120 sends the encrypted payment documentE₂ to the participating merchant acquirer server system 142, step 226,which decrypts the document and transmits it to the bank server system144, step 228, for authorization. In step 230, if the paymentinformation is approved, the bank server system 144 transmits a paymentauthorization response to merchant acquirer server system 142, whichtransmits a payment authorization document to merchant server system120, step 232.

Once the payment information has been approved and the merchant serversystem has received the payment authorization document, the merchantserver system 120 transmits the encrypted delivery document E₁ and anorder number to delivery server system 160, step 234. The deliveryserver system 160 decrypts the delivery document E₁, step 236, assignsan address signature to the order and transmits the address signature tothe merchant server system 120, which notifies the buyer system 110 thatthe order has been successfully processed via the merchant server systemwebsite, step 236. The address signature is similar to a trackingnumber, but uniquely identifies a shipping address as opposed to just apackage. In step 240, the merchant server system produces a label withthe address signature only, since it does not have access to the buyer'delivery address information, and transmits a delivery request to thedelivery server system 160. The delivery server system 160 matches thedelivery request to the address signature which includes the buyer'sdelivery address information. The delivery server system 160 transmits arequest to the security server system 130, step 242, for the securityserver system to notify the buyer of the delivery tracking numberinformation via the security server system's secure email component 132,FIG. 7. Security server system 130 transmits the delivery trackingnumber information to the buyer via its secure email component 132, step244. In step 246, the merchant server system 120 transmits the encryptedpayment document E₂, as well as the payment authorization document, tothe merchant acquirer server system 142, which decrypts the paymentdocument E₂ and transmits a settlement request to the bank server system144, step 248. Based on the payment authorization document, the bankapproves the settlement request and transmits payment, in the form of asettlement response, to the merchant server system 120, step 250. Instep 252, the delivery firm associated with the delivery server system160 picks up the package from the merchant firm associated with themerchant server system 120, matches the address signature on the labelprovided by the merchant server system 120 to the delivery addressinformation contained in the delivery document E₁ and delivers thepackage to the buyer.

Accordingly, the invention enables a purchase transaction to becompleted without disclosing any of the buyer's private information tothe merchant server system 120. By encrypting the buyer's deliveryaddress information into a discrete delivery document that includes onlythe buyer's delivery address information in a form which only thedelivery server system 160 can decrypt, the security server system 120ensures that only the delivery server system obtains informationpertaining to the delivery of the purchased item. Furthermore, byencrypting the buyer's payment information into a discrete document thatincludes only the buyer's payment information in a form which only thepayment processor server system 140 can decrypt, the security serversystem 120 ensures that only the payment processor server system 140obtains information pertaining to the payment of the purchased item.Since these discrete documents are encrypted before they are transmittedto the merchant server system 120, the merchant server system cannotaccess the buyer's information. This example transfers the pertinentinformation similar to the transaction shown in FIG. 3A.

FIG. 5 is a schematic diagram which shows a transfer of informationbetween the buyer system 110, merchant server system 120, securityserver system 130, merchant acquirer server system 142, bank serversystem 144 and delivery server system 160 in a situation where the buyerreturns a purchased product to the merchant for a refind. In step 300,the buyer system 110 informs the merchant server system 120, either bytelephone or email, that the buyer would like to return a product. Themerchant server system 120 validates the request, step 302, andinitiates a digest request, step 304, in which the customer providesinformation about the order, step 306, so that the merchant can identifythe order, step 308. The use of the digest array to identify a buyer isdiscussed in greater detail below with reference to FIG. 11B.Alternatively, order receipts and other proofs of purchase can be usedto authenticate the buyer system 110 without drawing on a digest arraycreated during the initial order. If the buyer is successfullyauthenticated, the merchant server system 120 approves the return, step310 and transmits the encrypted payment document from the initialtransaction to the merchant acquirer server system 142 for a creditauthorization, step 312. The merchant acquirer server system 142authorizes the credit and transmits a credit authorization to themerchant server system 120, step 314. The merchant server system 120then transmits a return material authorization (RMA) number in an emailto the buyer system 110 through the secure email component 132 of thesecurity server system 130, steps 316, 318. The buyer sends the itemback to the merchant through the delivery firm using the RMA, steps 320,322. The merchant server system requests a credit settlement from thebank server system 144, step 324. The bank server system transmits thecredit settlement to the merchant server system 120, step 326 and thebank server system 144 provides the appropriate credit to the buyer'scredit card, step 328.

FIGS. 6A, 6B and 6C are schematic diagrams which show a transfer ofinformation between the buyer system 110, merchant server system 120,security server system 130, merchant acquirer server system 142 and bankserver system 144 in the case of a buyer-initiated chargeback. Achargeback occurs when the buyer informs the bank that it will not payfor a charge resulting from a transaction. In step 350, FIG. 6A, thebuyer system 110 initiates the chargeback by informing the bank serversystem 144 that the charge will not be honored. The bank server system144 reviews the request, step 352 and instructs the merchant acquirerserver system 142 to search for the payment document associated with therequest, step 354. The merchant acquirer server system 142 transmits areport to the merchant server system including the nature of thecomplaint, step 356. The report only identifies the specific transactionto the merchant server system 120. At this point, the merchant serversystem only possesses information about the specific transaction anddoes not posses any of the buyer's personal information. The merchantserver system 120 and the buyer system 110 communicate with each otheranonymously through the secure email component of the security serversystem 130, steps 358-364. The merchant server system then transmits achargeback response to the merchant acquirer server system 142, step366. The merchant acquirer server system 142 transmits the request tothe bank server system 144, step 368, and the bank server system issuesa chargeback credit to the buyer's credit card, step 370.

The process shown in FIG. 6B is similar to the process shown in FIG. 6A,with the difference being that the security server system 130 createsthe report to the merchant server system 120 rather than the merchantacquirer server system 142. This enables the security server system 130to either encrypt or withhold private information of the buyer from themerchant server system. The process shown in FIG. 6C is also similar tothe process shown in FIG. 6A, with the difference being that themerchant server system 120 receives the chargeback request directly fromthe bank server system 144 without any intervention from the merchantacquirer server system 144 or the security server system 130.

The security server system 130 is also capable of enabling private emailcommunications between parties, in particular between the buyer system110 and the merchant server system 120. Security server system 130includes a secure email component 132, FIG. 7, with which both the buyersystem 110 and the merchant server system register. The secure emailcomponent 132 receives the buyer system's true email address and assignsa buyer alias email address to the buyer's true address. Likewise, thesecure email component 132 receives the merchant server system's trueemail address and assigns a merchant alias address to the merchant'strue address. All email transactions between the buyer system 110 andthe merchant server system 120 pass through the secure email component132. In this way, the neither party possesses the other party's trueemail address and all communication takes place through the secure emailcomponent with the alias email addresses.

FIG. 7 is a schematic diagram which shows this process. In step 402, themerchant server system identifies a buyer to which it will send an emailmessage. The message is created, step 404, and sent to the buyer's aliasemail address via the merchant's SMTP server. The email is directed tothe secure email component 132 by the buyer's alias address, step 406,where it is validated by the secure email component 132. Validationinvolves ensuring that a particular merchant is authorized to send emailto a particular buyer with the buyer's alias email address. If thevalidation is rejected, the message is returned to the merchant's trueemail address, step 408. If the validation is approved, the secure emailcomponent 132 rewrites the SMTP header on the email message, changingthe buyer's alias email address to the buyer's true email address, andthe merchant's true email address to the merchant's alias email address.The message is then sent to the buyer system 110 via the secure emailcomponent's SMPT server, step 410. If the buyer system 110 replies tothe merchant's email message, the reply is sent via the buyer's SMTPserver to the merchant's alias email address, step 412. The message isthen validated in the same manner as the original email message from themerchant server system 120. If validation fails, the message is returnedto the buyer's true e-mail address without having been delivered to themerchant server system 120, step 414. If validation does not fail, thesecure email component 132 rewrites the SMTP header on the mail message,changing the merchant's alias to the merchant's true e-mail address, andthe buyer's true e-mail address to the buyer's alias email address. Themessage is then sent via the secure email component's SMTP server to themerchant's true e-mail address (TMA).

In order to simplify the transaction consummation process, the system ofthe present invention enables the buyer system 110 to create anelectronic “wallet” which includes all of the buyer's information suchas delivery address information and payment information. The securityserver system creates the wallet by encrypting the delivery addressinformation into a delivery document E₁ and encrypting the paymentinformation into a payment document E₂ as described above. Once thewallet is created, it is stored in a database on the merchant serversystem 120 for future purchase transactions. FIG. 8 is a schematicdiagram of the process involved in the creation of the electronicwallet. In step 420, the buyer system 110, from the merchant serversystem website, requests that a wallet be created. The merchant serversystem prompts the buyer system 110 to create a user name and password,step 422. The merchant server system then directs the buyer system 110to the security server system 130, step 424, where the wallet creationtakes place. The security server system 130 sends a personal informationrequest form to the buyer system 110, step 426. In response, the buyersystem 110 provides the required information to the security serversystem 130, including the buyer's payment information, step 428, trueemail address, step 430 and delivery address information, step 432. Thesecurity server system 130 receives the information and encrypts thedelivery address information into the delivery document E₁, encrypts thepayment information into the payment document E₂ and creates an aliasemail address for the buyer system, steps 430-434. A digest array iscreated from the received information, step 436, and a protectedinformation package is assembled, step 438, which includes all of thebuyer's information in a form which is not decryptable by the merchantserver system 120. The package is transmitted to the merchant serversystem 120, which notifies the buyer system 110 via its website that thewallet has been successfully created, step 440. The merchant serversystem then parses the package into its separate documents, step 442,and stores the documents in a “wallet” associated with the particularbuyer in a database of the merchant server system 120. The merchantserver system 120 may request other information from the buyer, such asbuyer preferences and behavior profiles, which information is stored inthe wallet with the buyer's encrypted information, steps 444-448.

FIG. 9 is a schematic diagram of a transaction according to the presentinvention which includes the use of the electronic wallet describedabove. In step 502, the buyer system 110 establishes a connection withthe merchant server system 120 over the network 170. The buyer system110 places items in its shopping cart, step 504 and, when ready tocheckout, logs into its wallet which is stored on the merchant serversystem 120 using its user name and password, step 506. The merchantserver system 120 then asks if the buyer would like to follow anautomatic checkout procedure, step 508. If no changes are to be made tothe buyer system's information, the buyer system will choose thisprocedure. The process then proceeds to step 528, to continue thetransaction, wherein steps 528-552 are identical to steps 228-252 ofFIG. 4.

If the buyer system 110 does not select the automatic checkout, themerchant server system 120 transmits the wallet information to thesecurity server system 130, step 510. The security server systemdecrypts the wallet information, step 512, and transmits a form to thebuyer system 110 with a prompt to make any necessary changes to theinformation, steps 514, 516. The security server system 130 encrypts theupdated information into the delivery document E₁ and payment documentE₂, step 518. The new protected information package is assembled, step520, and transmitted to the merchant server system 120 to update thebuyer's wallet information. The transaction then proceeds with steps522-552, which are identical to steps 222-252 of FIG. 4.

The security server system 130 of the present invention is also capableof enabling the merchant server system 120 to conduct a direct marketingfulfillment process while keeping the buyer system's informationprivate. FIG. 10 is a schematic diagram showing the steps involved inthis process. In step 600, the merchant server system 120 develops atarget list of buyer's to which it will send direct marketing material.Since all of the buyer information in the possession of the merchantserver system is encrypted, this target list is also encrypted. However,since the different encrypted documents associated with each buyersystem or parsable by the merchant server system 120, it is able toprovide a list to the security server system 130 which includes theencrypted delivery address information of its buyers to the securityserver system 130, step 602. The security server system 130 decrypts thebuyer list, step 604, and transmits the buyer list to a fulfillmentserver system 172, step 606. The fulfillment server system 172 receivesthe direct marketing pieces from the merchant server system, step 608,labels them with the delivery address information received from thesecurity server system 130, step 610, and sends the labeled pieces tothe delivery firm associated with the delivery server system 160, step612. The delivery firm then delivers the direct marketing pieces to thebuyers. This process enables the merchant server system to cause directmarketing pieces to be delivered to buyers without the need for themerchant server system 120 to possess the actual delivery addressinformation of the buyers.

FIG. 11A is a schematic diagram showing the process involved in thecreation of a digest array, which occurs when the buyer system'sinformation is first input to the security server system 130. When thesecurity server system receives the buyer's information, such as insteps 210-214 of FIG. 4, the information S₁-S_(n), in addition to beingencrypted into documents that can only be decrypted by a predeterminedintended party, is passed through a hashing function 174 such as theSecure Hash Algorithm (SHA), which creates a hash output D₁-D_(n),corresponding to the information S₁-S_(n). The digest array is stored onthe merchant server system 120 for future reference.

If the buyer system 110 needs to contact the merchant server systemregarding a particular order, the merchant server system can match thebuyer with the particular order by using the digest array. For example,in the return process shown in FIG. 5, the buyer provides information tothe merchant server system 120 and the merchant server system searchesits digest array to match the buyer with the particular order. As shownin FIG. 11B, the buyer system discloses certain portions of information,such as its name 180, the last 4 digits of its credit card 182 and itszip code 184. This information is passed through hashing function 174 toform hash outputs 186 corresponding to the information 180, 182 and 184.The merchant server system 120 searches the digest array 188 until theinformation provided by the buyer enables a match in the digest array188 that enables the merchant server system to identify the particularorder.

Accordingly, the present invention provides a method of and system forenabling online transactions in which the merchant does not have accessto the buyer's private delivery address information and paymentinformation. The security server system encrypts the delivery addressinformation to form a delivery document which can be decrypted only bythe delivery server system. The security server system also encrypts thepayment address information to form a payment document which can bedecrypted only by the payment processor server system. The deliverydocument and the payment document are provided by the security serversystem to the merchant server system, which, in turn, distributes thedocuments to the respective server systems for processing during thecourse of an online transaction. While, in the example of FIG. 4, thetransaction carried out is in the form of the combination encryptionpipe/fork transaction shown in FIG. 3A, it will be understood that thesystem can be utilized to carry out any or all of the transaction typesshown in FIGS. 3A-3E. Furthermore, the system and method of the presentinvention can be utilized to carry out transactions which take the formof a token passing ring, such as is shown in FIG. 12A, wherein encrypteddocuments may be passed among all of the parties in the ring 190 and adistributive ring, such as is shown in FIG. 12B, wherein a head partyintroduces encrypted documents into the ring 194, which documents arethen passed among the other parties of the ring 194.

The invention may be embodied in other specific forms without departingfrom the spirit or essential characteristics thereof. The presentembodiments are therefore to be considered in respects as illustrativeand not restrictive, the scope of the invention being indicated by theappended claims rather than by the foregoing description, and allchanges which come within the meaning and range of the equivalency ofthe claims are therefore intended to be embraced therein.

1-29. (canceled)
 30. A transaction system for performing securetransactions over a communication network comprising: a merchant serversystem including a computer processor and associated memory, saidmerchant server system offering items for sale; a buyer system includinga computer processor and associated memory, said buyer system beingselectively coupled to said merchant server system over saidcommunication network to initiate a transaction, wherein, during saidtransaction, said buyer system selects one or more of said items forpurchase; a payment processor server system distinct from the securityserver system and including a computer processor and associated memory;a security server system distinct from said merchant server system andincluding a computer processor and associated memory and an encryptiondevice, said security server system receiving buyer information fromsaid buyer system, encrypting at least a portion of said buyerinformation in an encryption key that prevents said merchant serversystem from decrypting said buyer information, and transferring saidencrypted payment portion of said buyer information to said paymentprocessor server system; and said payment processor server system beingselectively coupled to said merchant server system for processing duringsaid transaction; wherein said merchant server system cannot decryptsaid encrypted payment information and said payment processor serversystem can decrypt said encrypted payment information; and wherein saidpayment processor server decrypts said encrypted payment information andusing said decrypted payment information, determines if said transactionis authorized or not, and communicates said determination to saidmerchant server system.